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I know the answers (they are bold) im just unsure how to show the work for these

ID: 2504325 • Letter: I

Question


I know the answers (they are bold) im just unsure how to show the work for these problems


Use the following information for Questions 8 & 9


The Sasita Corporation manufactures two types of vacuum cleaners, the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 20X5 were as follows:

Static Budget                     ZENITH    House-Helper            Total

      Number sold                        5,000                20,000          25,000

      Contribution margin    $1,500,000         $3,000,000   $4,500,000

      Actual Results              ZENITH    House-Helper            Total

      Number sold                        4,000                28,000          32,000

      Contribution margin    $1,280,000         $3,920,000   $5,200,000

Prior to the beginning of the year, a consulting firm estimated the total volume for vacuum cleaners of the ZENITH and House-Helper category to be 250,000 units, but actual industry volume was 256,000 units.

Question 8

What is the total sales-volume variance in terms of the contribution margin?

Question 9

What is the total sales-quantity variance in terms of the contribution margin?


Explanation / Answer

8. total sales-volume variance = (Actual units sold x budgeted average unit contribution margin)-Budgeted contribution margin = 4000*300 + 28000*150 -4500000 = 5400000-4500000 = 900000

9. total sales-quantity variance = (actual Number sold - budgeted Number sold) * budgeted Contribution margin per unit = (32000 - 25000)*(4500000/25000) = 7000*4500/25 = 1260000

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